Energy Quest, Inc. (OTCBB: EQST)

[greencat]

SOURCE: Energy Quest, Inc.

The MacReport.NetHENDERSON, NV--(Marketwire - September 8, 2009) - Energy Quest, Inc. (OTCBB: EQST) announces today that the President and CEO, Mr. Wilf Ouellette, has released the following letter to shareholders:

Dear Fellow Shareholders:

It has been a while since we last communicated with you on the progress your company has made. The purpose of this letter is to provide you with an update on our business, the developments / achievements, some background and an update on each of our business units for the fiscal years 2009/2010 and year-to-date 2009.

Company Overview

I would like to restate our mission statement which is to become one of the leading new age alternative energy and fuel companies through the use of green technologies to support our environment worldwide.

The fiscal year 2009 has been a year where we have strengthened our position in all business units and continued to position ourselves strategically in the lucrative but often complex market place. During the last 12 months we have built on our existing opportunities and have secured additional opportunities that are complimentary to our current business which we anticipate will lead to greater wealth for all shareholders.

Our registered office is in the United States (Henderson, Nevada) and our principal operation is in Edmonton, Alberta, Canada.

Energy Quest's Principal Business and Technologies

Energy Quest, Inc. is active in the research, development and commercialization of "alternative energy" technologies. The term alternative encompasses green and/or renewable energies. Once considered "alternative" these technologies are fast becoming the future of energy as traditional sources become increasingly more expensive and scarce.

The Energy Quest, Inc. (EQI) technologies represent the culmination of years of persistent research to provide an environmentally sound alternative to current energy generation programs. EQI believes that caring for the environment must be one of its core values. "Our focus is on providing shareholders with above average returns, our customers with superior energy all the while respecting the environment in which we live."

Each System is independently tested, ensuring that it meets and exceeds the requirements of the newest North American regulations, the newest European Union regulations and all appropriate operations and the most stringent emissions standards of any client's jurisdictions. Energy Quest, Inc. believes that our obligation to the environment arises not only from an ethical responsibility to our fellow stakeholders on the planet, but also from our responsibility to safeguard the trust of our shareholders and employees. We believe that investors will choose to support companies that have demonstrated their ability to minimize their impact on the environment, and the wisdom to preserve the implacable Energy Quest Environmental Commitment.

We are dedicated to bringing about the following changes:




-- A clean, safe and healthy environment
-- To increase the use of waste materials as a form of clean fuel to
provide cleaner energy
-- Reduce the size of and need for landfills
-- Reduce the use of fossil fuels
-- Reduce the use of greenhouse-gas producing technologies
-- Utilize where possible, recycled by-products
-- Improve our technologies to produce ever-cleaner ways to provide
energy
-- Become a leader in the provision of clean energy
-- To become a champion for the environment
The Company's board and management are focused in 5sectors:


-- Alternate Energy -- Enhanced Modular Gasification
-- Hydrogen -- Low Cost Production -- PyStR Process
-- Oil and Gas -- Oil Upgrading -- No Waste Petroleum Coke -- Minimal
Water Usage
-- Coal -- Coal Emulsion Process -- Converts Low Grade Coal to a High
Quality Fuel
-- Water Treatment -- Cleaning And Purifying Using Ultrasound
Gasification Technology

During Fiscal 2005, the Company acquired Syngas Energy along with all rights and title to its advanced gasification process and gasification production system technology that combines modern gasification with gas turbine technologies to produce synthetic gas or electricity.

The technology uses gasification processes to convert any carbon based material into a synthetic gas. Gasification uses heat and pressure which converts any carbon containing materials into synthetic gas composed primarily of carbon monoxide and hydrogen which has a large number of uses. Gasification can add value to low or negative value feed stocks by converting them to marketable fuels. The feed stocks used to create synthetic gas depend on what is readily available. Throughout North America, forestry, pulp and paper waste and biomass can be converted into a synthesis gas and fed back into power plants. Various other industrial wastes can be fed back into plants to recycle "lost energy" that would otherwise go to landfills.

Since the acquisition of Syngas Energy EQI has completed a prototype of the gasification technology. During fiscal 2008 EQI plans to commercialize the advanced gasification unit.

PyStR™ Process -- Hydrogen Production

PyStR™ (pronounced, "Pie Star"), is a low cost hydrogen production technology. Currently, we are in discussions to put together projects which would use the PyStR™ technology to convert low-value biomass wastes feedstock, coal and petroleum coke to high-value products such as Hydrogen, Methanol and fertilizers.

In February 2006 we unveiled the PyStRTM technology at the Big Hydrogen Show in Calgary, Alberta. Since then, we completed a prototype and have plans to commercialize the PyStR™ hydrogen production process.

In February 2006 we further completed the carbon dioxide (CO2) capture unit for our PyStR™ technology. The captured carbon dioxide (CO2) can be injected into coal seams to recover methane in a similar fashion to injecting CO2 into depleted oil wells to enhance oil recovery. Traditional gasification technology lets the CO2 escape into the air, but the PyStR™ technology captures this green house gas that is commonly accepted to be responsible for global warming.

Carbon dioxide sequestration in coal beds can be more efficient than sequestering it in oil wells because CO2 injected into a coal bed seam displaces adsorbed methane (CH4) from the coal surface. Coal beds in North America represent a widely dispersed potential geological sink for CO2 storage while offering an opportunity to recover commercial quantities of methane for field uses or marketing in nearby natural gas pipelines. The U.S. Department of Energy and Canadian Government (Alberta Research Council) has been researching development of this sequestration concept for disposal of CO2 emissions.

CO2 is now being used throughout the oil patch to revive oil wells thought to be dry. Typical oil production leaves 70% of the resource in the earth. The process is used in wells that have already passed through primary production, where natural pressure in the well pushes out the oil, and in wells that have passed secondary production, using water or natural gas flooding. In primary and secondary production well pressure eventually falls to levels where output is so thin it is not profitable. Use of CO2 allows an opportunity to take a third run at the reservoir to tap a potentially large amount of remaining oil.

The CO2 is pumped deep below the earth's surface into thick, stubborn oil deposits, and significantly decreases the oil's viscosity easing its flow to the surface. CO2 is expected to double or triple previous oil production levels from wells once thought unfeasible. Once in the ground, the carbon dioxide takes the petroleum's place, becoming trapped beneath an impermeable stack of limestone, sandstone, and shale.

Through its PyStR™ hydrogen production process, EQI can capture CO2 that is produced either as a primary or bi-product. Some coal resources in North America cannot be mined by today's mining standards, but carbon dioxide sequestration technology has the potential to change that. Surface coal can now be mined and gasified in the Company's advanced gasification and PyStR™ systems, with the CO2 injected (sequestered) into coal beds to bring out the methane. Through the PyStR™ hydrogen production process EQI can capture CO2 that is produced either as a primary or bi-product.

Heavy Crude Oil Ultra Sound Upgrader

The Upgrader process can upgrade oil without producing waste petroleum coke and uses a minimum amount of water. The essence of this technology is that an electromagnetic field is used to cause an alignment of the long chain hydrocarbon molecules, which are then subjected to ultrasonic energy waves to create cavitation bubbles within the working fluid -- crude oil, heavy oil, tank bottoms, or bitumen. Unlike conventional processes that require an external source to apply the required heat and pressure to force the hydrocarbon molecules to break into lighter fractions, the bubbles created by the system's periodic cavitation are caused to collapse at great temperatures (+5000 Celsius) and pressure (+10,000 psi). It is this collapse that causes the breaking of the long chain hydrocarbon molecules WITHOUT the need for external sources of heat and pressure.

The system is capable of upgrading oil from 8 API to 38 API gravity or even a higher API. All processes are carried out within a temperature range of 0o to 70 o C and pressure within 0.8x105 to 5x105 Pa. Due to these lower temperatures and pressures, energy consumption is nominal and operating costs and maintenance costs are significantly reduced in comparison to other methods.

Energy Quest, Inc. CEO Issues Letter to Shareholders